Brooklyn Mirage Creditors Seek Trustee Takeover, Citing ‘Fraud’

Creditors of bankrupt New York City live music venue and festival owner Avant Gardner moved to appoint a trustee to take over the company, citing allegations of mismanagement, fraud, and conflicts of interest.

The committee representing unsecured creditors also challenged proposed bankruptcy financing and a sale bid from secured lender Axar Capital Management LP. The committee raised its concerns in a Sunday filing in the US Bankruptcy Court for the District of Delaware.

Avant Gardner last month said it lined up a starting credit bid worth at least $110 million from an affiliate of Axar, which creates a baseline for competitive bidding. The credit bid includes a portion of prebankruptcy secured loans and all of the pledged $45.8 million in bankruptcy financing.

Avant Gardner parent AGDP Holding Inc. filed for Chapter 11 in August after its flagship indoor-outdoor stage, the Brooklyn Mirage, failed to reopen for the 2025 season due to a renovation that was hit with cost overruns and city permitting problems. The company also runs the Electric Zoo electronic dance music festival.

The unsecured creditors said in a partially redacted motion that a trustee is necessary because Avant Gardner made misrepresentations about the Mirage’s renovation. The committee also pointed to decisions to enter into “usurious” merchant cash advance deals and predatory payday loans, and said the board and CEO are conflicted due to Axar’s appointments and influence.

Avant Gardner has also failed to remit key taxes, creditors said.

Axar CEO Andrew Axelrod declined to comment.

Axar incrementally took control of Avant Gardner over several years by installing associates into management and board positions, creditors said. After the Mirage’s building permit revocation days before its scheduled reopening on May 1, Axar installed the head of a funeral and cremation business it controls to take over management decisions and oversee renovations, creditors said.

The Axar-controlled board and management sought to classify the Mirage stage as a temporary structure to get around construction and safety standards, and submitted its designs to the city without a roof to evade maximum height requirements, the committee said. The amount of floor space was also submitted incorrectly to “skirt requirements concerning square footage limits for mezzanines and balconies,” it alleged.

The issues led to New York City revoking the stage’s operating permit and it not being able to open, the committee said.

Creditors also called a proposed sale timeline compressed and “rigged” and said the company’s assets were undervalued to ensure Axar wins them. Axar’s credit bid works as a “sub rosa” restructuring plan that bypasses typical Chapter 11 safeguards and grants the lender and leaders broad liability releases, creditors said.

The company has faced a series of issues since 2017, including allegedly unlawful overcrowding at its venues, failure to pay vendors and employees, and other problems with permit and licensing, according to the objection.

Creditors pointed to Avant Gardner’s 2023 Electric Zoo Festival “disaster” in which the first day was canceled due to a failure to build stages and other safety structures, a lack of needed permits, and overselling 7,000 tickets—leading to “people storming the gates,” according to the objection.

The committee is represented by Morris James LLP and Orrick, Herrington & Sutcliffe LLP. Avant Gardner is represented by Young Conaway Stargatt & Taylor LLP. The lender is represented by McDermott Will & Schulte LLP.

The case is AGDP Holding Inc., Bankr. D. Del., No. 25-11446, motion 9/5/25.